The gaming market
Some 85 per cent of all gaming in Norway takes place via regulated gaming companies. According to the Norwegian Gaming and Foundation Authority, around 2.5 million Norwegians take part in some form of gaming during the course of a year. Around 90 per cent of these will have played via Norsk Tipping during that year.
As per 20 April 2021, no official figures have been released regarding the size of the Norwegian gaming market in 2020, although Norsk Tipping estimates it was worth a net NOK 12.8 billion (gross turnover less prizes). That is NOK 400 million more than in 2019. Measured in terms of net turnover, around 85 per cent of all gaming takes place in the regulated market.
Norsk Tipping’s net turnover rose by just over NOK 300 million to around NOK 8.5 billion. The company’s market share is estimated to be more than 66 per cent, a slight increase on 2019. Bingo and terminal games saw a reduction in turnover because they were completely or partially closed down for parts of the year. In the other regulated market, it is estimated that Norsk Rikstoto saw a small amount of growth in its horse racing games.
The unregulated market, which consists of gaming companies operating illegally in Norway, is now estimated to account for 15 per cent of the market.
Norsk Tipping’s estimate is based on a combination of the figures available and our knowledge and experience. These calculations have historically proven to correspond very well with the Norwegian Gaming and Foundation Authority’s official figures, which will be released later.
A stable market
The regulation of gaming in Norway is based on the fundamental assumption that there is some appetite for gambling among the general public. Therefore, a regulated offering must be available that is attractive enough for the public to choose it over the unregulated offering. This is called channelling and is an important element of Norsk Tipping’s social mission.
Most sporting events were cancelled in spring 2020 and this led to somewhat reduced turnover for sports betting for the full year. However, the category’s customer numbers were stable. The online casino, online bingo and digital scratch cards portfolios saw growth in both turnover and customer numbers. This happened despite the introduction of immediate measures designed to cool down this market towards the end of the year.
In total, Norwegians lost NOK 2.1 billion in Norsk Tipping’s sports and online games in 2020, an increase from NOK 1.9 billion in 2019. This growth suggests that channelling increased in that part of the gaming market where the company is facing fierce competition from foreign gaming companies. Norsk Tipping has previously warned about online casinos (in Norwegian). More activity in games that are high risk in relation to problem gambling also means that Norsk Tipping’s work on responsibility needs to be constantly renewed and improved. Norsk Tipping also needs to take a critical look at the orientation of its games portfolio, how it should be developed, and what the marketing should look like.
With around 2 million players every year, Norsk Tipping’s lotteries have been the most attractive games in the Norwegian gaming market for several decades. The lotteries have many customers who participate with low stakes and the games are recognised as representing a low risk of developing problem gambling. With an increase from NOK 5.7 billion to NOK 6 billion, it was precisely these lottery and scratch games that saw the greatest growth in 2020. The games’ market share grew from 46 percent in 2019 to 48 percent in 2020. Together with the other regulated lotteries, this category accounts for half of the net turnover in the Norwegian market. A strong lottery portfolio is a fundamental requirement for properly channelling the desire to gamble towards a moderate and publicly regulated offering.
Changes in the gaming market
Norsk Tipping has for many years been concerned about the movement of players from low-risk games in the lottery category (Lotto, Joker, Vikinglotto, etc.) to faster and more aggressive games such as online casino and bingo games.
The ongoing pandemic has increased our concern since it has led to more people being at home for longer periods, the disappearance of some games (like physical terminals and sports betting), and many households facing uncertain private financial situations.
Surveys (in Norwegian) conducted by the company during the initial phase of the pandemic indicated that only a small number of players were refocusing their stakes on more risky games. Some months later, the figures indicated that some of the slot machine players who had lost their offering had instead switched to offerings from online gaming companies.
One positive finding from the pandemic is that the responsibility measures, which include mandatory limits, have functioned very well as protection for players in an extraordinarily demanding period.
Towards the end of the year, many players increased their stakes and Norsk Tipping saw an increase in turnover. Part of this may be due to an increased offering caused by postponed fixtures in, for example, English football.
The company introduced a number of immediate measures (in Norwegian) in December aimed at preventing the customer base moving in a riskier direction.
More problem and at-risk gamblers
In 2019, the University of Bergen conducted a new public survey (in Norwegian) and the results were presented in 2020. Compared with the previous study from 2015, the results show that the scale of problem and risky gaming among the public has increased. You can read more about this in the chapter Responsible operations (in Norwegian)
The Nordic gaming markets
Sweden and Denmark
Denmark and Sweden have opened their live betting and online casino markets up to competition. National exclusion registers have been launched in both countries. Generally the same types of games are included in the licensed games, the use of bonuses is permitted, and licence holders are free to market online casinos and betting in all national media.
The significant volumes of gaming advertising have been a source of debate in both. The recommendations in the gambling market report (in Swedish) from December 2020 commissioned by the Swedish government, include banning regulated gaming companies from advertising online casinos during the daytime.
Despite the fact that around 200 gaming sites are licensed, major challenges in relation to unregulated gaming companies are reported in the Swedish market. It is estimated that their turnover is in the range of billions of SEK. The channelling rate is lowest for games that represent a higher risk of developing gambling problems such as live betting and online casinos and is lowest for the latter. The authorities are now looking at ways of reducing the unregulated gaming market in Sweden.
Denmark has far fewer restrictions for licence holders. This may be a contributory factor behind why its unregulated market is reported as being smaller than in Sweden. Nevertheless, numerous unregulated gaming companies are trying to reach Danish consumers. The fact that the Danish authorities have blocked Danish consumers’ access to around 90 online gaming sites is an expression of this.
Only welcome bonuses are allowed in Sweden.
The Finnish authorities have chosen a different gaming model to Sweden and Denmark. Like Norway, they have decided to strengthen the monopoly model. The authorities have taken a number of steps in the last few years, which include working on a new Gaming Act and merging the three Finnish gaming companies, Veikkaus, Fintoto and RAY. Much of the turnover in the Finnish gaming market comes from slot machines, not unlike the situation in Norway in the early 2000s. The Finns are currently working on introducing registered games and loss limits like Norsk Tipping’s slot machines have had since 2008, and on reducing the number of slot machines.
Problem gambling in the Nordic region
There are no pan-Nordic public surveys that analyse problem gambling, and since the methodologies and samples in the national surveys vary, it is difficult to make direct comparisons.
From 2005 to 2016, there was a significant reduction in problem and risky gambling in Norway, while from 2015 to 2019 there was a highly concerning increase. In Denmark, there was a slight increase in problem gambling from 2005 to 2016, although it was at a lower level than the recent increase in Norway. Few public surveys have been conducted in Denmark, although new results are expected in 2021. In Sweden, the public health authorities state that risky gambling has been between 3 and 4 per cent in recent years.
The research study The societal costs of problem gambling in Sweden estimates that the societal costs of problem gambling are around SEK 14 billion, or approximately twice as much as the state’s revenue from gaming, which was around SEK 6 billion in 2018 and 2019 and SEK 7.5 billion in 2020.